South Korean Lawmakers Tie Crypto Tax Start to 2029 CARF Data Sharing

Democratic Party lawmakers in South Korea proposed starting the country’s 22% crypto income tax in January 2029, tying its launch to international data exchanges under a framework developed by the Organization for Economic Cooperation and Development (OECD). If enacted, the proposal would mark a fourth postponement of the levy.

The proposal would start the tax two years after the first year countries exchange data through the Crypto-Asset Reporting Framework (CARF). The framework lets tax authorities collect users’ tax-residency and transaction information from crypto service providers and exchange it across borders.

The United States is not due to join CARF until 2029. That timing could make it harder for South Korean authorities to obtain records of trades made through overseas exchanges before then, potentially leaving users of domestic platforms to shoulder more of the tax burden.

Once the levy takes effect, the law would tax annual income from crypto transfers and lending after a 2.5 million won deduction. The combined rate, including other income tax and local income tax, is 22%.

South Korea added the tax in a 2020 revision to its Income Tax Act, initially scheduling it to begin in 2022. The start date was later moved to 2023, 2025 and 2027.

An unnamed presidential office official said discussions had shifted toward delaying the tax, but the office has not made a final decision. The People Power Party also favors a delay, while other lawmakers have proposed moving the start to 2030.

Finance and Economy Minister nominee Lee Hyoung-il said in written materials submitted to the National Assembly in September that the tax should begin as scheduled. On Oct. 22, Democratic Party leader Kim Min-seok called for a decision this year. The presidential office is expected to consult with the governing party after this month’s parliamentary audit and then settle on a position.